How to Maximize Credit Card Rewards

Credit Card Rewards – Perks of Rewards Program

According to a 2011 research from Colloquy and Swift Exchange, the average household active in rewards program do not redeem a third of the rewards they tend to earn every year which could include credit card rewards. John Ulzheimer, president of consumer education at Smart Credit.com comments that `there are a slew of people out there that has cards with points on all of them and they don’t even realize it’.

 The idea of receiving rewards credit card is to give the person the perks of the rewards program and the best way to ensure that one gets the most out of the rewards credit card is to use the right one and make sure it is paid off each month.

It could be used to the greatest advantage while also being aware of the possible pitfalls like leaving points on the table. The first problem is to ensure that the credit card and rewards program chosen matches the individual’s financial lifestyle.

 If the person travels a lot during free time, then a hotel or airline card could suit the individual while a gas credit card could be best for a road warrior. Those who would prefer an uncomplicated reward system could opt for cash-back credit cards, according to vice-president, Amy Lenander, of rewards programs at Capital One.

Cash Rewards Easy & Straightforward

She states that `cash rewards tend to be easy and straightforward as rewards can develop. Customers who prefer miles and points could save up for a big reward and dream up the possibility, whereas the cash-back customers tend to be more practical’.

Besides this, several cash back cards are provided with various ways of redeeming rewards like in the form of cheques, statement credits, charity donation or gift cards while others tend to automatically deposit the rewards directly in the bank account. It is essential to read the terms and conditions since not all cards are created equal even if they offer a similar form of reward program.

There are various forms of credit cards wherein some may require spending threshold prior to earning rewards while others cap the amount of rewards that is earned. Users should also be aware of blackout dates in redeeming travel rewards or the expiration date on points. Linda Sherry, director of national priorities at watchdog group Consumer Action also informs that these rewards programs are subject to change at any point of time.

Some Advanced Planning

Cash back cards could also involve some advanced planning and while most cards provide one percent to two percent cash back there could also be certain restrictions or requirements. These could include caps on spending in various categories or more rewards on purchases on gas, groceries or dining. Other cash back rewards programs could be even more difficult, with rotating categories needing quarterly registrations.

According to Bill McCracken, CEO of Synergistics Research in Atlanta, states that in some cases, consumers tend to pick the spending category and receive the rewards or the rewards are given to the highest spending category. This could mean more observing by the consumer in taking full advantage of their credit card.

Consumers should be alert for opportunities to double or triple their reward earning power. Lisa Hronek, senior analyst at Mintel Comperemedia informs that several issuers tend to offer an increased cash back return rate each quarter for certain categories usually the ones that go according to the season.

Few Financial Mistakes We Should Avoid!

Regardless of our income, financial situation or lifestyle, it is wise to manage personal finances and avoid unnecessary spending. Many people do not pay enough attention to where their hard-earned money goes. Here is a compilation of some financial mistakes and tips to avoid them.

Credit card Usage:

 According to famous economist, a credit card is an essential financial tool, but only when it works for you and not vice versa. The credit card allows you to make online payments, regulate your purchasing power, to accumulate rewards points and build a solid credit rating. By cons, it is easy to fall into the traps when you are in financial pressure. Avoid all cash advances, unpaid balances, minimum payments and late payments in a credit card. These are all ways leads you to get into debt and sullying your credit reputation. It is also necessary to handle the number of credit cards and their limits as they may hurt you when you apply for a car loan or mortgage.

Budget:

 Do not holding a personal budget is a mistake that could cost you without you even knowing it. Holding a budget is your advantage to take the time to analyze your income and expenses and then focus on what is important to you. A budget is not synonymous with austerity, but prosperity, because knowing where your money goes and you can avoid unnecessary leaks profit pleasures (restaurants, trips, outings and other). 3. Not realize that the "little expenses" add up quickly. You maybe realize or not, but daily losing $ 3 is more than $ 1,000 annually, enough to pay for a trip! Day to day, these expenses seem innocuous, but your budget will prove just the opposite. A simple change in your habits will save you considerable sums.

Financial commitments:

When you make financial commitments such as buying a house, a car or even furniture, make sure you do not live on the edge of your means. The game plan here is in case of a loss of income that would stretch or if an increase in interest rates and therefore monthly payments. Live to the nearest dollar that you do bring additional stress and not happiness.

 Having an emergency fund:

 Would you be able to find $ 2,000 to repair your car in case of mechanical failure? Can you able to pay $1,000 for unexpected medical expenses? In addition to a transaction account (also called checking account) and a savings account, you should have an account for emergencies to bet the contingencies of life. Do not rely on your credit card to fix these problems because you risking to pay the price. Do take advantage of discounts: Without falling into consumerism, trying to find good deals when shopping. Competitive traders such as banks, dealers, supermarkets, shops, tour operators and others cut their prices to have you as a customer, so enjoy. Just be careful: a discount is not necessarily a bargain!

Open a joint bank account:

 Love is blind, it is known. Opening a joint bank account may seem like a good idea when the relationship is doing well, but when things escalate, you may regret your decision. Make arrangements just between you and your spouse and think twice before opening a joint bank account. Avoid unnecessary bank charges: Paying a withdrawal fee is an aberration! Try to withdraw money from ATMs of your bank and take larger amounts to avoid annoying situations. In addition, you will be less likely to spend the cash on you compared to a credit card.

Take advantage of tax cuts:

 When you make investments or save money, you use all the financial vehicles available to save tax? The government offers a variety of products for tax saving which are tax-advantaged. Contribute the maximum to those who make the most sense for your situation.

Plan your future:

 We are good at planning things trivial: dinner with friends, a romantic evening or a weekend with the family, but how much time does we spend planning our future? Buying a house, organizing a major trip, planning a career or studies are all crucial decisions. Make sure you think about and plan for your future that is to your liking.